Great 2ndQ results, 11th great Q in a row. Now that the stock has been included in the TSE 300, should see much more institutional buying, which should help the stock price. I think $10+ is a reality before year end.
FOR: MOSAIC GROUP INC.TSE SYMBOL: MGXAUGUST 10, 1999
Mosaic Posts 11th Consecutive Quarter Of Year Over Year
Revenue, Cash Flow & Earnings GrowthTORONTO, ONTARIO--
Revenue Up 94 percent, Cash Flow Up 95 percent, Eps Up 67 percent
Mosaic Group Inc. (TSE:MGX), Canada's leading outsourced marketing
services agency today announced record levels of financial
performance. Net earnings increased by 74 percent, from $1.91
million to $3.32 million for the second quarter. After tax cash
flow from operations exhibited strong growth, rising 95 percent
year over year to $7.14 million in the second quarter of 1999. On
a per share basis fully diluted earnings increased 67 percent to
$0.05 in the second quarter of 1999, with year-to-date fully
diluted EPS of $0.08 up 60 percent from the prior year. For the
first six months of the year fully diluted cash flow per share was
$0.18, up 50 percent from the prior year.
"I am very happy with our Company's results so far in 1999," said
Michael Preston, Mosaic Group Inc.'s chairman and chief executive
officer. "As we look back over the first six months of 1999, our
financial results are illustrating that our growth strategy is
working. The new services that we are adding and the new
geographic areas that we are entering are enhancing not just our
revenues, but more importantly our per share earnings and cash
flow. When you consider our successful track record of
acquisitions in conjunction with the solid 26 percent organic
revenue growth rate posted in the second quarter, you have an
understanding of the building blocks that we use to enhance
shareholder value. That's why our per share results continue to
improve, quarter after quarter."
"Our record results have been achieved even while expensing year
to date $1.5 million in new investment related to our e-commerce
initiatives. We expect our e-commerce initiatives to generate
operating earnings by the end of the third quarter. Our run rate
revenues in e-commerce and new media activities now exceeds $20
million, up from $8 million last year. Mosaic Expands: Size Opens New Doors
"Mosaic has expanded quickly, both in terms of the number of
geographic markets that we serve and the variety of services that
we offer," Preston continued. "Our acquisition criteria have two
key dimensions: each must contribute a new capability or
geographic area, and they must add to the bottom line and cash
flow on a per-share basis. By focusing on these acquisition
criteria, and by effectively integrating the businesses that we
acquire, we have been able to enjoy growth that is both
substantial and well-managed.
"A significant part of our integration program is the development
of cross-selling initiatives among our business units. We have
scored some significant cross-selling wins in 1999, including new
work for Sony, United Distillers, Iomega, Bell World, Charles
Schwab and the Ontario Lottery Corporation. Cross-selling is a key
part of the value proposition that Mosaic can offer the
marketplace - business wins that our units could not have achieved
as stand-alone companies. As Mosaic grows, we are proving that the
sum is greater than the parts.
"We are also capitalizing on the benefits that come from the
critical mass that we have built up in the areas in which we
operate. We are able to bid on progressively larger pieces of
business - multinational, integrated sales and marketing programs
that we can offer to the world's largest companies. Many of the
opportunities that Mosaic is currently pursuing are of an
unprecedented scale - pieces of business that were not available
to us when we were a younger and smaller company. A prime example
of the scope of these business opportunities is the $150 million
five year program that we recently secured with the Prudential and
which commences in January, 2000.
"The development of larger opportunities is already beginning to
affect Mosaic's healthy strong internal growth rates. In the
second quarter, Mosaic had an internal revenue growth rate of 26
percent, excluding the impact of acquisitions. The rate was 27
percent for the six months ended June 30, 1999.
"Looking to the end of the year, we look forward to continued
growth as we enter our clients' peak summer and holiday spending
periods. For 1999 we anticipate full year revenues approaching
$400 million," Preston concluded.
Mosaic Group Inc., with operations in the United States, Europe
and Canada, provides outsourced marketing services on an
integrated basis to leading corporations serving international
markets. Mosaic combines strategic thinking with leading edge
technologies to effectively deliver immediate and measurable
results for its clients. Marketing solutions include electronic
marketing, e-commerce, new media services, contract sales,
merchandising, field marketing, direct marketing, database
development and management, product promotion, corporate
communications and sales force training. Mosaic, which has
approximately 71 million shares outstanding, trades on the TSE
under the symbol MGX. |
